Documents & Reports

Reinvigorating the agenda for open trade (English)

Abstract

Pakistan's trade performance is disappointing. Despite being in a very dynamic region, the country's position in world trade has barely changed over the past three decades. The trade to gross domestic product (GDP) ratio showed only a very small increase... See More +Pakistan's trade performance is disappointing. Despite being in a very dynamic region, the country's position in world trade has barely changed over the past three decades. The trade to gross domestic product (GDP) ratio showed only a very small increase in the last decade. Exports generally lack sophistication, and dynamism (as marked by entry and exit in foreign markets and new exports) has declined in recent years, coinciding with the reversal of trade policy to a less open stance since the mid-2000s. Open trade is central to any growth strategy worldwide, no successful growth story has exclusively featured inward-looking growth. Restoring the country's place in international markets is thus critical for resuming growth, raising productivity, and creating jobs. To improve its trade competitiveness, Pakistan needs to simplify tariffs and trade regulations in order to reduce the anti-export bias; accelerate deep preferential trade agreements to encourage trade creation; fully normalize trade relations with India to benefit from growth there; and address logistical weaknesses to reduce trade costs.
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